Controversial plans to introduce a system of 'secret justice' will be used to cover up allegations of torture and war crimes, a former top Army legal officer has warned.

Lieutenant Colonel Nicholas Mercer, who served as the Army's chief legal adviser in Iraq, said he had 'reeled with horror' at plans for sweeping powers allowing ministers to withhold 'sensitive' information from open civil court cases and inquests.

Lt Col Mercer, now an Anglican priest, was a key figure in bringing to light the case of Baha Mousa, an Iraqi hotel worker who died following a savage beating by British soldiers in 2003.

Horrified: Former Army legal officer Nicholas Mercer (left) was heavily involved in the case of Iraqi Baha Mousa (right), who was beaten by British soldiers

The case is widely seen as one of the most shameful episodes in the Army's recent history and has led to major changes in the guidelines for handling detainees.

But Lt Col Mercer told the Daily Mail the case would never have come to the public's attention if the proposals had been in place.

'I was heavily involved in the Baha Mousa case and fought against the use of degrading treatment against prisoners of war,' he added.

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'It has left me very suspicious of the state apparatus. There is a natural tendency to try to cover things up – it is very hard fought. I have no doubt if this legislation had been in play it would have been used to cover up most of the details of the death of Baha Mousa.

'Behind the scenes there were a lot of recriminations against people who had disclosed evidence or talked about it. The Ministry of Defence – not the Army so much, but Whitehall – did not want anything appearing in the Press.

'I am quite convinced this legislation will be used to cover up evidence of complicity in torture and rendition. Its remit is even wider and there are plenty of cases in the pipeline that will be caught by it.'

The security services have been pressing for the secrecy measures in the wake of the case of former Guantanamo Bay inmate Binyam Mohamed, who sued the Government for complicity in torture. Labour ministers tried to conceal documents disclosing his alleged mistreatment, but were over-ruled by the courts.

But critics claim the new measures, which also apply to inquests, would have allowed ministers to cover up scandals surrounding cases such as the 7/7 bombings, the killing of Brazilian Jean Charles de Menezes, who was shot dead by police after being mistaken for a terrorist, and a number of deaths caused by so-called 'friendly fire' in Iraq.

David Cameron mounted an outspoken defence of the proposals in the Justice and Security Green Paper last week, arguing they were needed to prevent terror suspects making compensation claims against the security services in cases that involved sensitive intelligence material.

But he made no mention of the proposed use of secret proceedings in inquests or wider civil cases – leaving the door open to a possible compromise in this area.

Despite Mr Cameron's stance, senior Liberal Democrats, including Nick Clegg, are understood to be seeking 'clarification' of the proposed legislation from the Ministry of Justice. One source close to Mr Clegg said: 'At the end of the day, the Government has been consulting on this, and people have expressed concerns, some in very strong terms.

Former Guantanamo Bay prisoner Binyam Mohamed sued the Government for complicity in torture

'Most people accept there is a problem with the way some terror compensation cases have worked. But it may be that we need to reassure people about the intention and the breadth of what the Government is trying to do.'

Under the plans for 'closed material proceedings', ministers will be able to withhold 'sensitive' information from open civil court cases and inquests, and require the evidence to be heard in secret.

The plans have provoked a storm of protest from the legal profession and civil liberties campaigners.

Even the so-called 'special advocates' who would oversee the secret hearings have warned that the changes have the potential to 'damage the public interest'.

Lt Col Mercer said: 'It is no surprise to me that most lawyers, including the special advocates and judges, are opposed to it – it is an affront to justice.

'At a basic level I do not see how you can act for a client if you cannot discuss the evidence with them.

'As a state, the use of torture and rendition is illegal and corrupting. I'm now a clergyman and I would appeal to all those involved to look to their consciences.'